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Truck fuel economy rule coming next week

PHOENIX. With proposed new Federal fuel-economy standards for medium- and heavy-duty trucks expected next week, the good news is that the initial phase will be achievable with current technology at little additional cost to truck buyers, according to a panel of engine and truck manufacturer representatives at the annual American Trucking Assns. conference here

PHOENIX. With proposed new Federal fuel-economy standards for medium- and heavy-duty trucks expected next week, the good news is that the initial phase will be achievable with current technology at little additional cost to truck buyers, according to a panel of engine and truck manufacturer representatives at the annual American Trucking Assns. conference here.

The bad news is that Washington regulators are using economic assumptions in formulating future fuel-economy goals that are very different than those used by fleets, according to one panelist.

The rule is in response to a Presidential order signed in May. Based on a study by the National Research Council, the intention is to cut CO2 greenhouse gas emissions while also reducing U.S. dependency on foreign oil imports. The overall goal of the coming rule is a 3% improvement in fuel economy by 2014 compared to 2010 performance, a 5% gain by 2017, and as yet unspecified improvements phasing in in 2020 and beyond. How those improvements will be measured will vary by truck size and application, but both truck manufacturers and engine makers will be required to certify fuel economy performance gains.

The panel, which included executives from Cummins, Daimler Trucks North America, Navistar, Paccar and Volvo Powertrain N.A., agreed that the 2014 target could be reached by fine-tuning fuel systems and emissions aftertreatment, as well as by moving heavy-trucks to more efficient tires and aerodynamic treatments, and implementing more idle reduction strategies.

Offering that DTNA “would prefer a free-market solution” to improving fuel economy, president and CEO Martin Daum said, “a 3% improvement is feasible with current technology.”

Jack Allen, president of Navistar’s N.A. Truck Group, also told ATA members that “we believe the 2014 requirement is an evolution, and it shouldn’t worry you or us.”

The second phase, however, will probably require development of new technologies. Representing a common view expressed by all five panalists, Paccar VP Craig Brewster pointed to waste heat recovery systems as the most likely candidate to achieve 2017 fuel economy requirements, at least on heavy trucks.

Another point of agreement among the panelists -- with new technologies will come additional costs. “We believe we can avoid any major cost increases to meet the standards until 2017,” said Steve Charlton, Cummins chief technical officer. “But then we’re going to need new systems like waste heat recovery, which will add cost and complexity.”

And that additional cost is where Federal regulators and fleets are likely to have widely different opinions. “Washington’s economics are not the same as your economics,” Tony Greszler, VP-government and industry relations for Volvo Powertrain, told ATA members.

Truck buyers estimate a $450 ROI for every 1% of fuel economy improvement based on a 4-yr. trade cycle, according to Greszler. “The regulators’ view is that the life cycle is 10 years and that every 1% improvement [in fuel efficiency] is worth $4030,” he said. That estimate, he pointed out, shapes how regulators will define “feasible” and “justifiable.”

“If regulators believe the market undervalues the benefits of fuel economy, they will push the market with regulation,” Greszler said.